An investigation is underway after about 300 people booked a trip to Torquay, run by Bilston company TT Tours, but were left waiting in the cold on Monday.
The holiday would have seen people stay at the Headland Hotel or the Riviera Hotel until Friday.
People were initially told they would be given refunds from the company at its premises in Bilston Market on Thursday morning, but the owners failed to turn up and so Trading Standards set up in Bilston Town Hall to offer customers advice.
Trading Standards also changed the locks on the company's unit and seized evidence from it.
A message on the TT Tours Facebook page said: "Tony Taylor [the owner] has messaged me this morning and confirmed that he will not be arriving and he is filing for bankruptcy.
"I have been in contact with the police who have said everyone is to contact action fraud/trading standards 03001232040. This is now in the hands of the action fraud."
The Express & Star has contacted TT Tours for comment.
Dozens of people turned up to get advice at the town hall.
Sisters Joy Whittall, 69, and Janet Leek, 71, were at the town hall at 8am wanting answers.
Mrs Whittall, from Woodcross, said: "It isn't just about the money, it was the preparation too, we had to book taxis to get there. We're all pensioners."
Malcolm Hart, 77, was one of a large group to book on the trip, which had paid £3,200 in total.
Mr Hart, from Wednesfield, said he went to Skegness on a TT Tours trip with his wife Sheila, and they had also paid a deposit for another trip this year.
"When we went to Skegness the coach came about an hour late then we were told the hotel was cancelled so we had to move to a different hotel," he added.
Margaret Matthews, 69, was looking forward to her first holiday after 15 years.
She was planning to go with Joan Tranter, 78.
Mrs Tranter said: "I've been on a lot of them before.
"I've been told he did the same last year. I had a disabled man with me on crutches standing there for three quarters of an hour in the cold.
"I've booked to go to York next month and another at Christmas.
"I'm hoping to have my money back and then that's it, the door is shut on him."
Mrs Matthews said: "My husband died before Christmas, I was really looking forward to this."
Paul Dosanjh, service lead for Trading Standards, said the business has been running for 14 years and based in the market for the past year.
He said: "It's a developing situation, it's something we've learned about in the last few days.
"We started to get people coming to the market asking what's going on.
"TT Tours have booked people on a trip to Torquay for £99, the coach didn't come and people were told the trip was off.
"The hotels told people there were no bookings.
"People have turned up as they'd been told they'd get refunds but the business has not turned up.
"We've got people who have been misled. We're working on the figure of around 300 holidaymakers.
"We have to start an investigation to find out what's happened and we'll be giving people advice as to what they can do.
"The fact that they haven't turned up makes me think it will be problematic.
"We don't want anymore customers misled."
Mr Dosanjh said people can call Citizens Advice on 08082 231133.